He led that party to a very poor showing in the 1982 provincial election, in which the party received 4.51% of the popular vote and won no seats in the provincial legislature. However, Goodale was the only Liberal candidate to receive more than 1,000 votes.[2]

The party won 9.99% of the vote in the 1986 provincial election, but only Goodale was elected to the legislature. Goodale ran on a platform of fiscal responsibility in this election, arguing that both the Progressive Conservative and New Democrat (NDP) parties favoured excessive spending policies, typified by their proposals for a Keynesian-style stimulation of the provincial economy through subsidized home improvement and renovation schemes.

Goodale then spent five years in the private sector, working for companies such as the Pioneer Life Assurance Company, Pioneer Lifeco Inc., and Sovereign Life Insurance Co.; he has stated in interviews that he felt his political career had ended.

A close ally of Paul Martin, Goodale was appointed to the senior portfolio of Finance Minister when Martin became Prime Minister on December 12, 2003. In that capacity he tabled two consecutive balanced budgets and launched the Government's productivity agenda.

On December 28, 2005, a letter surfaced from Royal Canadian Mounted Police (RCMP) CommissionerGiuliano Zaccardelli confirming the force was launching a criminal investigation into whether details regarding government tax policies relating to income trust funds were leaked from the Finance Minister's office. Goodale said he would co-operate completely with any investigation, but would not step aside while the RCMP continued their probe. The investigation deals only with the Department of Finance, and not the minister himself.[4] On February 15, 2007 the RCMP announced the conclusion of the income trust investigation and laid a charge of 'Breach of Trust' against Serge Nadeau, an official in the Department of Finance.[5] Goodale was cleared of any wrongdoing.[6] Goodale blamed the NDP's Judy Wasylycia-Leis for sabotaging the Liberals in the 2006 election.[7]

After the Liberals' defeat, and Paul Martin's election night announcement that he would be resigning as party leader, Goodale initially indicated that he was not interested in succeeding Martin in that post. "I do not anticipate ever having to cross that bridge," he said. "I rule it out."[8] On March 16, 2006, however, the Toronto Star reported that Goodale was reconsidering his decision, and stated that he may enter the Liberal leadership election after all.[9] In the end he declined, citing his inability to speak French as a key reason. On November 28, 2006, he endorsed Bob Rae to be the next leader of the Liberal Party.[10] After the third ballot, Bob Rae, who finished third, was eliminated. Goodale then endorsed Stéphane Dion, the eventual winner.

In November 2008, the three opposition parties in the Canadian parliament indicated their intention to defeat the Stephen Harper government in a motion of no confidence, and expressed their desire for Governor GeneralMichaëlle Jean to ask a member of the opposition to form a new government. There was initially some speculation that Goodale would become Prime Minister of Canada as leader of the proposed coalition government.[12] However, the coalition agreement simply made "the leader of the Liberal Party" Prime Minister, and the Liberals agreed shortly after that Stéphane Dion would lead the government on an interim basis until a new Liberal leader was chosen.[13] In the end, parliament was prorogued by Jean at the request of the prime minister before a confidence vote could be put to the house. By the time parliament resumed in January 2009, Michael Ignatieff had become interim leader of the party. He did not seek to bring down the government and agreed to support Harper's budget with amendments.

Goodale was one of the 34 Liberal MPs who was returned in the 2011 federal election.

The NDP surpassed the Liberals in number of seats, becoming the official opposition, resulted in priority in choosing parliamentary offices. They requested that Goodale forfeit his suite in the coveted Central Block. The Liberals saw this as a measure of disrespect to Goodale, noting that he had seniority as a former cabinet minister and house leader, despite this being standard practice and noting the Conservatives had not asked any Liberals to give up their offices.[7]

An order in council on November 4, 2015,[16] places Goodale as first in line to assume the prime minister's powers & duties as acting prime minister, should Prime Minister Justin Trudeau become incapacitated. Trudeau did not appoint a deputy prime minister.